TaxTMI 
TaxTMI 
2015 (5) TMI 235
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....will take up the facts in Appeal No.1690 of 2013 which is the lead case pertaining to assessment year 2001-2002. 2. The facts, in brief, are as follows. The assessee is a foreign company engaged in the shipping business and is a tax resident of Denmark. A firm by name and style M/s. A.P. Moller Maersk A/S was designated as the managing owner of the company as well as another Denmark resident shipping company by name Atieselskabet Dampskibsselskabet Svendborg (ADS). M/s. A.P. Moller Maersk A/S was assessed to tax during the assessment years 2001-02 to 2003-04. The Commissioner of Income Tax held that A.P. Moller Maersk A/S being the managing owner, the income from the shipping business would be taxed in the hands of the two shipping compan....
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.... assessee's appeal. This is how the assessee approached the Tribunal which allowed the appeal of the assessee following decisions of the Madras High Court Skycell Communications Limited 251 ITR 53 (Mad) and the Delhi High Court in Commissioner of Income Tax vs. Bharati Cellular Ltd. 319 ITR 139 (Del). The Tribunal, in the present case had occasion to consider the nature of the costs incurred by the assessee. In doing so, it observed that the three agents were booking cargo and acting as clearing agents for the assessee and were entitled to utilisation of the MaerskNet facility which consisted of a communication system connected to a main frame and other computer services in each of the countries of operation. These were all connected to....
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....ystem, it would not be possible to efficiently carry out the business of shipping cargo and that each of these agents would be in a position to effectively communicate with the assessee and other relatable companies in the group so as to efficiently carry out the shipping business on a global scale especially since the consignments would be sourced from and dispatched to different locations. No technical service was thus rendered by the assessee. It is merely an automated system using advanced technology and there was no human element involved in terms of "rendering of services" which would be the requirement of Article 13(4). 7. Mr.Kaka further submitted that the facility known as MaerskNet was located in Denmark where the assessee was a ....
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....hat case. Moreover, in the present case, there was no occasion for the Tribunal to come to any different view. In our view, the Tribunal has correctly observed that utilisation of the Maersk Net Communication system was a automated software based communication system which did not require the assessee to render any technical services. It was merely a cost sharing arrangement between the assessee and its agents to efficiently conduct its shipping business. In the case of Safmarine Container Lines NV (supra), the assessee is a shipping company was charging freight for picking up goods from places within India and delivering them at the destination port. This collection of Inland Haulage charges which the customers would pay was in respect of ....
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....attention is also drawn to the decision of this Court in the case of Commissioner of Income-tax V/s. Siemens Aktiongeselleschaft reported in [2009] 310 ITR 320 (Bom), wherein this Court has held that once there is a treaty between two sovereign nations, though it is open to a sovereign Legislature to amend its laws, a DTAA entered into by the Government, in exercise of the powers conferred by section 90(1) of the Act must be honoured. The provisions of Section 9 Income Tax Act were applicable and the provisions of DTAA, if more beneficial than the I.T. Act, the provisions of DTAA would prevail. Thus, in the instant case also, it is not possible for the revenue to unilaterally decide contrary to the provisions of the DTAA. We are informed th....